HC Deb 08 December 1975 vol 902 cc169-89

10.12 p.m.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley)

I beg to move, That the European Communities (Definition of Treaties) (No. 3) Order 1975, a draft of which was laid before this House on 12th November 1975, in the last Session of Parliament, be approved.

Mr. Deputy Speaker (Mr. George Thomas)

It will be for the convenience of the House to take at the same time the following Order: That the European Communities (Definition of Treaties) (No. 4) Order 1975, a draft of which was laid before this House on 2nd December, be approved.

Mr. Hattersley

If the House approves these Orders, the seven treaties specified in them will become formally defined as Community treaties under Section 1 of the European Communities Act. That Act gives effect to all the rights, powers, liabilities, obligations and restrictions embodied within a Community treaty. But only Community treaties formally defined as such, under Section 1(3) of that Act, have effect in the United Kingdom. Without the approval of both Houses of Parliament to the treaties listed in the schedules to the Orders, they would create rights and obligations at the international level but could not, for instance, be invoked before the courts of this country.

With your permission, Mr. Deputy Speaker, and that of the House, I will describe briefly the contents of the Orders and the treaties which are embodied therein. If the House has detailed and complicated questions to ask about them and my right hon. Friend the Chief Secretary to the Treasury is able to catch your eye, he will be happy to answer them.

The No. 3 Order contains in its Schedule what amounts to amendments to the pre-accession treaties which, under Section 1(2) of the European Communities Act, automatically carry all domestic and international obligations. These are the three basic treaties of the Community—the EEC Treaty, the ECSC Treaty and the Euratom Treaty—and a fourth treaty which merges them together.

I shall return to the No. 3 Order in detail because that is the Order which may well be of particular interest to the House. But I wish first to describe the five treaties specified in the No. 4 Order which the House has agreed should be discussed at the same time.

In Part I of the Schedule to Order No. 4, a single treaty is specified. It gives tariff preferences for European Coal and Steel Community products originating in Israel. If the provisions of that treaty come into force, there will be certain advantages to member nations—all nine of them as opposed to the original six members of the Community.

In Part II of the Schedule to Order No. 4, four treaties are specified. The first is the Protocol of the EEC-Greece Agreement. It concerns provisions for mutual assistance between customs authorities for the prevention of fraud and it extends these provisions to the three new members of the EEC.

The second treaty specified in Part II of the Schedule concerns a Protocol relating to the EEC and Greece and provides for a full customs union between the EEC and Greece which will come to fruition between the period 1962 to 1984 and provides for financial assistance and the free movement of labour during the period when that customs union is being created.

The third treaty specified in Part II is an agreement between the European Coal and Steel Community and Israel agreeing to the provision of free trade in certain products.

The fourth treaty is a treaty specified in the form of an exchange of letters which renews agreements between the EEC and its member States and the Lebanese Republic, giving the Republic of Lebanon the status of most favoured nation. Those are the treaties which are specified in the No. 4 Order.

I now return to the definition of the No. 3 Order—

Mr. Eldon Griffiths (Bury St. Edmunds)

Will the hon. Gentleman accept that from the point of view of the Opposition it is not very satisfactory to have to debate together such an extraordinary mixture dealing with the accession of Greece, imports from Israel and technical co-operation with the Lebanon? I simply make the point. My hon. Friend the Member for Harrow, East (Mr. Dykes) will deal with it later in more detail. I hope that the hon. Gentleman will take account of the fact that we find it most inconvenient to deal with such a mélange.

Mr. Hattersley

If the hon. Gentleman has read the Order, as I am sure he has, in his usual assiduous way, he will know that in each of the treaties it specifies a number of common features. The common features are the extension of provisions, which previously applied to the original members of the Community, to the new members of the Community, and on almost every occasion it is an extension of reduced tariffs and free trade arrangements. Therefore, there is a great deal of similarity between the Orders.

I hope the hon. Gentleman will not be confused by superficially reading what appears on the note or the Order, or superficially listening to what I say. If he examines the Orders and the treaties, even he will eventually conclude that there is some similarity in all of them. In spite of the fact that two apply to Greece and one to Israel, they are all concerned with reductions in tariffs and free trade arrangements.

I freely admit that the second Order is different from the other with which it is linked. The European Communities (Definition of Treaties) (No. 3) Order is the major item—

Mr. Nigel Spearing (Newham, South)

Before the right hon. Gentleman leaves the Definition of Treaties (No. 4) Order, will he confirm something he said about the European Communities (No. 142) Order—the one with Greece? Did he say that there would be a free movement of labour between all member States of the EEC, with Greece not necessarily becoming a member of the Community, just by virtue of the treaty the House is being invited to approve tonight?

Mr. Hattersley

No. The association treaty, which I am sure my hon. Friend has read, is now in the Vote Office in the form of a Command Paper and gives Greece the opportunity to move towards free movement of labour at the time when association becomes complete. However, that is not operative immediately. If my hon. Friend reads the treaty, he will know the stages and the slow pro- gress with which that might conceivably be achieved.

I turn to the European Communities (Definition of Treaties) (No. 3) Order which is the main issue before the House this evening. The two items in the schedule to that Order are the budgetary powers of the European Assembly and the establishment of an audit court. The proposals in the treaty are the outcome of long negotiations within the Council of Ministers and between that Council and the European Assembly. They are proposals which were agreed within the Council of Ministers on 4th June 1974. They were signed by representatives of member States during July 1975. However, we ask for the ratification of both Houses of Parliament so that they may enter into force now.

I deal, first, with the budgetary powers of the Assembly. The Treaty of 22nd April 1970 defines the present powers of the Assembly in relation to budgetary matters. It stipulates that from 1st January 1975 the full own resources system applied to the Six original Members of the Community. At the same time it specifies the Assembly's power over the budget.

Today we seek approval for a slight further extension of those powers which, if this House agrees and if agreement is obtained in another place, can be defined under five headings. The first is when the Assembly seeks a modification to the budget which does not involve an increase in the total of obligatory expenditure. By that I mean that the Assembly proposes specific increases and reductions to compensate for them. That change in the budget is accepted by the Council of Ministers unless the Council of Ministers provides a qualified majority against the new proposals.

Secondly, modifications to the budget involving increases in the total obligatory expenditure are accepted only if there is a qualified majority in favour of the new gross total. That is a reaffirmation of the previous proposal. Thirdly, the Assembly, acting with a majority of two-thirds of votes cast, is able to reject the whole draft budget and to ask the Council of Ministers for a new draft. Fourthly, when the draft budget is not adopted by the last day of the year—the system which is normally applied—its monthly expenditure is limited automatically to one-twelfth of the previous year's budget and the Assembly will have the last word if the Council decides to spend more than one-twelfth in any one month on the "non-obligatory" chapters. Fifthly, the Assembly gives a discharge to the Commission in respect of the implementation of the budget.

These are limited extensions of the Assembly's powers, but they certainly are extensions and are intended to give representatives of the European Parliament the right to play a role in determining the nature, the extent and the area of Community spending.

The second material provision of this Order concerns the Court of Auditors and involves Articles 11, 15 to 18, and 27 and 28 of the major treaties. It creates a Court of Auditors which is intended to have a higher status and wider powers than the present Audit Board which examines spending within the Community. The Court will possess powers to examine all revenue and expenditure accounts and will be given the task of ensuring not only that spending within the Community is consistent with Community law but that it is consistent with sound financial management.

The Court of Auditors will publish an annual report both to the Council of the Community and to the Assembly, and by that means will, we believe, extend proper financial supervision and surveillance and a proper responsibility for financial matters within the Community. In our view the Court of Auditors is directly related to the proposals made by my right hon. Friend the Prime Minister for creating something like the Public Accounts Committee within the Community, and we hope that it will be the beginning of an extension within the Community of the sort of budgetary powers which exist in this House.

Because we believe that the objects of the Order concerning the budgetary powers of the Assembly will improve the efficiency and the working of the EEC we commend it to the House. Because the previous Order has an item to extend free trade relationships and free trade provisions of the Community with what are called third countries we commend that, too, and we hope the House will approve both Orders.

10.27 p.m.

Mr. Hugh Dykes (Harrow, East)

The House is still at that stage of grappling with European Community items of one kind or another, but I suppose that one could say in one sense that the grappling tonight will be less than we have experienced recently—for example, on security matters. There is here already a little corpus of experience because we are dealing with Orders Nos. 3 and 4 of the series—the second having been dealt with in November at the tail end of the last Session.

We had a debate on the Floor of the House, and a number of hon. Members, quite justifiably, raised the question of the mixture of items. The Minister of State said tonight, again, with some justification, that there is a common element running through the items before us, but I do not believe he can take that too far. As my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) said, perhaps the mixture is not as bad as on that amazing occasion upstairs in the Standing Committee on Statutory Instruments in March this year. That was the first Order of the series, and it contained a combination of Coal and Steel protocol adjustments and the setting up of the European graduate university institute. Perhaps the mixture tonight is not as painful as that, but the Minister of State should have some thoughts about how we shall deal with these matters in the future.

Perhaps in Order No. 3 the mixture is not too violent because of the sheer separation. There is the European Investment Bank and there are amendments to the provisions of the protocol, one which the Minister of State explained in some detail. However, he did not have time to go into Order No. 5 which contains five separate items and an enormous and complicated list of matters. It starts with the European Coal and Steel Community agreement with Israel. I am curious to know the amount of steel or steel products involved. Another item deals with association with Greece, another with Israel and, finally, one with Lebanon.

The Minister of State said that there was a common theme running through these Orders. I am sceptical about that. Bearing in mind that there are deficiencies in the scrutiny procedure which we should try to overcome, we must honestly consider how we can deal with such immensely complicated matters in the maximum of an hour and a half's debate. My personal view is that it might have been wise to separate Orders Nos. 3 and 4 so that at least some semblance of a fuller debate could have been attempted.

Mr. Hattersley

With respect, the hon. Gentleman had only to say "No" when the proposal was put to the House.

Mr. Dykes

I and hon. Members from both sides of the House are grappling with these matters. I do not want to labour the point too much tonight. I hope that in future we shall be able to have more satisfactory procedures because this is a question not just of the House scrutinising Community Instruments, be they primary or secondary legislation, but of the House approving treaties under Clause 1 (2) and (3) of the European Communities Act.

I suppose that the Minister of State and others could, with some justification, say that we are just giving effect to treaties, or renewing treaties if they were treaties before the Treaty of Accession, or making new treaties or proposals if they occurred after the signing of the Treaty of Accession. Be that as it may, I hope that by emphasising the matter the point has been registered with the Government.

I shall raise one or two matters on these complicated documents and ask the Minister to deal with one or two questions. The Opposition welcome and endorse entirely what the Minister has said about the establishment of the Court of Audit. Hon. Members from both sides of the House may wish to say something about the strengthening of the budgetary provisions. There is only a slight reinforcement and I believe that we should collectively work towards a substantial reinforcement of the budgetary powers of the European Parliament prior to direct elections, whenever they come.

I should have thought that there was universal enthusiasm for the provisions relating to the Court of Audit and also for the healthily stringent and welcome conditions which are to be established for setting up this court. At the end of February the Prime Minister made an important speech which did not get the type of publicity which usually attaches to his speeches. He spoke at some length about the establishment of a European Parliament PAC. The Conservative Party looks forward to that. I ask the Minister what timetable he has in mind for this. The European Parliament has not yet got down to establishing this committee, which presumably must need the ratification of this agreement. In that context, how long does the Minister expect the ratification to take with the other member States? This matter has dragged on for quite a substantial time, but that is no criticism of the technicians involved in drawing up the complicated set of clauses.

I shall comment briefly on Order No. 4 before raising one or two questions which affect the European Investment Bank. I should like to ask the Minister whether he will say a little more about the association agreement with Greece and the putative future horizon of Greek membership. Can the Government say any more about their attitude to Greek membership? There has been a great deal of controversy about this matter, and I know that it goes beyond the narrow confines of this Order.

None the less, it is materially important to this and other member States. There is controversy, even amongst those who want to see Greece join, about how long it will take for Greece to get in, bearing in mind that Greece has basically a weak economy. It may be that political objections to Greek membership are non-existent. I happen to believe that that is so. The economic arguments against early membership are tangible, but that does not mean that we do not welcome with open arms the idea and principle of Greek membership.

The final Order, relating to the agreement with the Lebanon, is the one exception to this list of measures. It is a renewal provision, necessary because the agreement ran out in July and needs to be renewed until July 1976. What looks likely to happen then, and to any future arrangements? Coming back to the present day, is not the present situation in the Lebanon worrying? Is this likely to affect United Kingdom trade with the Lebanon? With regret, I assume that it is. One hopes that it has not made too much of a dent in our trade.

On the European Investment Bank, which is the subject of the third Order, there is a combination among hon. Members of enthusiasm, misgivings about its future and some questions about its present operations. So far as these stray briefly beyond the marvellously esoteric subject of the construction of the unit of account for the bank, I hope that the Minister may have some answers to give.

We should, for example, like an explanation of how the unit of account is to be constructed under this new treaty revision. Presumably it is entirely satisfactory and no matter for controversy, except that in the debate in the European Parliament earlier this year, a number of party groups tried to get an amendment accepted which would have allowed the Commission a decisive role in being consulted by the Bank after the Governors—that is, the Finance Ministers of the member States—felt it desirable to make an immediate change in the unit of account finances. That amendment was rejected, and rightly sopartly because one should do nothing to reduce the EIB's operational freedom—despite the protests of Commissioner Borschette himself, who wanted the Commission to have that decisive rôle.

The EIB has been an unqualified success. A rather more specialist body than some other Community institutions, it has morale and resources, as well as a board and a committee of management which are energetic and dynamic, and it appears to fulfil its role satisfactorily.

Could the Minister say something about the handling of applications for loans? I base this question on a regrettably brief conversation that I had with the British Vice-President, Sir Raymond Bell, some months ago, when he gave the impression that United Kingdom applications were slow in coming forward. It may therefore be necessary to give publicity in this country to the bank and what it can offer. Is more publicity needed?

For example, one sees in the annual report that the loans to United Kingdom companies totalled 149.5 million units of account, which was more than double the total in 1973, our first year of membership, and therefore perfectly satisfactory. But the figure for France was 193.7 million units of account. Admittedly, France has been a member State since inception, and that makes a difference, assuming that there is a build-up of loan applications. But France now has a bigger and richer economy than the United Kingdom. That is regrettable but true. Therefore, the case for assistance from the EIB to legitimate projects in this country must, presumably, he commensurately greater.

The Minister has done a service to the House in giving an explanation, but I do not think that it goes far enough. Although there was no protest at the beginning of the debate when the motion was moved, there should be longer debates, and I hope that they will be possible in future.

10.40 p.m.

Mr. Nigel Spearing (Newham, South)

The protests to which the hon. Member for Harrow, East (Mr. Dykes) referred arise directly from the procedure, about which we have no choice. Under Section 1(3) of the European Communities Act, we have these Orders in Council, which are notionally the sort of Orders that we have for our domestic legislation, but on the back of the Orders, and only on the back, we find in the small print references to the Command Papers that are really the substance of what we are discussing. Some of them can be laid at a relatively late date, and important pieces of legislation can pass through, under the guise of a domestic Statutory Instrument, with relative ease. Grave dissatisfaction about that procedure was expressed during the passage of the measure and we are seeing some of the results of the procedure tonight.

I share the doubts about a common theme. If there is a common theme, it is a procedural one, and an unsatisfactory one at that. The House has a difficult choice. We could send the Orders upstairs to a Committee that could discuss them for an indeterminate period, perhaps two and a half hours or three hours—my right hon. Friend the Lord President has not yet said how long. But the Committee can pass no motion other than that it has considered the Orders. If it comes across something it thinks important, it has no procedural means of drawing it to the attention of the House when the Order is brought back to the House. That procedure, which we are not using tonight, but which is open to us if 20 Members rise, is unsatisfactory.

The present procedure is even more difficult. I am sorry that the two Orders are being taken together. I did not hear the proposal, because of the noise at the end of the Division. It would be better to take the Orders one at a time, in view of the range of subjects involved. However, we are now saddled with this procedure. Unless the House decides that it does not wish to approve the Orders tonight, or my right hon. Friend withdraws one, the Orders will go straight through.

The (No. 4) Order refers to a number of documents, but the main ones concern the customs agreement with Greece, European Communities Document No. 151; the matter with Israel, European Communities Document No. 137; and the matter contained in European Communities Document No. 142—an additional protocol to the agreement establishing association between the EEC and Greece.

I intervened in my right hon. Friend's speech because I had read Document No. 142 and the annex dealing with sparking plugs, brushes and brooms, and tights and stockings imported into Ireland from Greece, and I did not recall anything about the free movement of labour. My right hon. Friend gave a reply that did not entirely satisfy me. I understand that if we pass Document No. 142 tonight it means that at the end of the transitional period a free movement of labour can begin between this country and Greece. My first assumption was that it would start after the acceptance of the Order. My right hon. Friend corrected me, and said that it would start after the transitional period. If that is so—I hope that the Chief Secretary will make the situation clear when he replies—it means that we are being asked to approve a document that says that at the end of the transitional period provided for in the protocol there will be free movement of labour between this country and Greece thereafter, or certainly that such a system will be introduced, or that we shall have an obligation to introduce it.

If that is so—and I understand that it is the case—I would have thought that the Government would think twice about introducing this measure in this way. If what I have said is correct, I hope that the Minister will have second thoughts about the European Communities (Definition of Treaties) (No. 4) Order. I think that even he will agree that the opportunity open to us tonight is not adequate to discuss something of major significance both to this country and to Greece. We all know the problems broubht about by free movement of Labour, particularly from countries that have not been so fortunate as we have been, in terms of income and industry.

Some hon. Members may ask why the matter has not been referred to by the Scrutiny Committee. These documents have not been before that Commitee because they are treaties ratified by the Order in Council. Again, this outlines the unsatisfactory and bad way in which the House is being asked to consider matters that can be of great significance.

I turn to the European Communities (Definition of Treaties) (No. 3) Order which relates to the change in budgetary procedures and the European Investment Bank. I hope that the Minister would say in what way the document changed the present procedure in relation to that contained in European Communities Document No. 138. However, the Minister did not do so. Therefore, I hope that the Chief Secretary will confirm that it means that the Assembly will, if it has a complete majority, be able to modify any part of the budget. At present the Assembly has relatively limited powers over certain administrative parts of the budget but, following the modification, it will be able to range over the entire field, subject to the Council, acting by qualified majority, modifying any of the amendments adopted by the Assembly.

This raises an important matter in terms of a qualified majority. If the Assembly has these powers, the Council will not be able, unless it has a qualified majority, to reverse the decision. I hesitate to suggest that this will be similar to a House of Commons versus House of Lords situation, but it opens up the possibility. At the moment, if any one of the members of the Community does not agree the qualified majority is not reached, but if in future there is any accession to the Community by other States it will mean that that qualified majority will be reached.

Mr. John Roper (Farnworth)

As I understand the situation, the position in regard to qualified majority was amended by the Treaty of Rome at the time of the last accession, and no doubt there will be further amendment.

Mr. Spearing

My hon. Friend is right. The original treaty was amended on the accession of the United Kingdom, Denmark and Eire. I thought that even within the qualified majority a matter could be blocked if one of the major members of the Community did not agree, but if, in future, there is an enlargement of the Community, the qualified majority could be more easily obtained.

Mr. Roper

My hon. Friend seems to have missed the point. The point I made was that if on the previous occasion an amendment was made, a similar amendment would presumably be made at the time of any further accession.

Mr. Spearing

I am very grateful to my hon. Friend because he used the words "would presumably be made." I think that is a very important point, and I am grateful to him for having mentioned it, because although these may appear to be matter of detail, I am sure that in the future they could be of very great significance for the country and, indeed, for the working of the Community as a whole. It would be bad if the House of Commons were approving a significant change in the Treaty of Rome without the Official Report recording the position as it was before the change.

Finally, I turn to the European Investment Bank and the definition of the way in which the unit of account can be changed. I should like my hon. Friend to explain, for the benefit of people who are not very well up in the detailed finances of the Community—I include myself in that number—the link between the unit of account as defined for the purposes of the European Investment Bank and the unit of account as defined for ordinary procedures of the Community. I presume that the definition for one is different from the definition for the other, and that one could be changed at a different time from the other. But if that is so, does it not produce complications in matters of investment? If not, perhaps my hon. Friend will explain why not.

I fully concede that I am not as knowledgeable as I ought to be in these matters, but many people reading this debate will see that these are very detailed matters which can have considerable significance in the future economic and social life of this country. Therefore, I do not apologise for raising these points this evening.

10.52 p.m.

Mr. J. Enoch Powell (Down, South)

I associate myself with the hon. Members for Harrow, East (Mr. Dykes) and for Newham, South (Mr. Spearing) in their criticisms of the procedure whereby we are considering essentially disparate treaties under these two Orders.

I am not at all objecting to the decision that was suggested by the Chair and adopted by the House, that we should take these two Orders together, because that has hardly increased our embarrassment. After all, it has only increased from four or five to six or seven the number of items that we are combining together by the method which I think the Romans called per saturam. It was, incidentally, not permitted to do that in the Roman Senate, at any rate in its better days.

The right hon. Gentleman the Minister of State suggested that the disparity was really not so great, because there was a technical similarity between the various treaties. They were treaties assimilating the position of the new members to that which had existed with the earlier Six. Nevertheless, even in the brief debate already it is quite clear that there are considerations that apply to one of those treaties which do not apply to the others.

If the argument be—I am not sure that it was, and I hope it was not—that since these arrangements already existed at the time of our entry, for the original Six, it really is not practical politics for us to discuss them more than formally, I believe that that would be in breach of the essential purpose of Section 1(3) of the European Communities Act 1972.

Those of us who lived through the lengthy debates on Clause 1 of the Bill will remember the great interest which the House took in this form of legislation—at one stage it was called "legislation by prerogative"—whereby the law of this country could be altered by a treaty, provided that that treaty was written into the Act of 1972 by such an Order as is at present before us. Had the House been told in 1972 that it would be the practice not to put forward the new treaties for the consideration of the House one by one, but to lump four or six together, several supporters of British membership would have been reluctant to agree to Clause 1(3) without some amendment to ensure that treaties should be dealt with separately.

I hope, therefore, that in future in drawing these Orders the Government will as far as possible proceed upon the basis of "one treaty, one Order". I know that that kind of proposition does not look very attractive to the Leader of the House and the Patronage Secretary, but a wise Leader—which of course we have—and a wise Patronage Secretary—which of course we have—are aware from experience that often a procedure which appears likely to cost the House more time proves in practice to be a saver of time. I believe that it would be so if the, Government in this respect conformed with the wishes which have been expressed by both sides of the House.

I come now to the one substantive point which I wish to make. It has been touched upon briefly from the Opposition Benches and at greater length by the hon. Member for Newham, South. By applying to the three new members of the Community the arrangement for association with Greece—the arrangement which was described in shorthand as a developing customs union—we are accepting as an intention all that follows from association. Indeed, it is not a mere customs union, and no more, into which we enter by association. The process is integral to the nature of the Community itself, and is intended to lead not merely to the free movement of labour but, in due course, to full membership. I do not think that that is denied. To deny it would deprive the proposal of much of its reality.

We are, therefore, entitled—indeed obliged—on this first tentative step, to consider what is meant by membership of the Community on the part of a country situated as Greece is. It is of the nature of this kind of process that at one moment the House is told "This is merely the first stage of a move towards a customs union", and at the next stage it is told "The House, of course, has agreed to a customs union and therefore it is implicit that we move on to the free movement of labour". Having moved to the free movement of labour and association, we are informed "It is far too late to argue about these matters: the principle has been decided, and if there had been any objections they should have been raised earlier".

I am raising my objection much earlier; I am raising it now. Even if it were conceivable that the nine members of the Community should form an economic and monetary union—which is the same as a political union—with the common democratic institution of a directly elected Assembly, it is totally inconceivable that Greece should form part of such a union. This is so for a very simple and very crass reason, but one which is evidenced by recent and by earlier history—that is, its geographic remoteness.

In all economic and political union, in all democratic union, which is what we are talking about, contiguity is absolutely vital, and the attempt to link together, either in a federal union or—

Mr. Roper

indicated dissent.

Mr. Powell

The history of the last 20 or 30 years illustrates what I am saying. While one can, with some prospect, seek to amalgamate contiguous territories and contiguous populations—although the difficulties are severe enough there—the attempt to amalgamate into a political union territories and populations which are widely Separated geographically invariably founders.

Mr. Roper

One might cite counterexamples, such as the States of Hawaii and Alaska, which are part of the United States and seem in perfect accordance with the other 48 States. There are other parts of the world where areas noncontiguous with the main part of a political entity are able to work with that entity.

Mr. Powell

The hon. Gentleman is entitled to his Hawaii and Alaska—

Mr. Michael Stewart (Fulham)

And Northern Ireland?

Mr. Powell

Northern Ireland is 14 miles removed from the mainland of Great Britain and has been linked with Great Britain historically from the most primitive times. If the right hon. Member for Fulham (Mr. Stewart) wishes to extend my term "contiguous" to include "adjacent", I accept his correction. But we are quibbling if we attempt to ignore the wide geographical separation of Greece, by a large part of Europe, from the members of the EEC.

I am aware that Turkey, also, is expected to be in the same bag. Absurdity reaches an even higher level there, for the notion that Greece and Turkey and the nine members of the EEC could be welded together into a democratically-governed unit, economic, monetary and political, is total nonsense. It is manifest nonsense. No one can seriously believe that such a possibility exists. What we are doing at the moment is taking the first tentative step towards that, without anyone seriously believing that we are ever going to get there but nevertheless invoking the implication that that is the intention somewhere along the road.

This being, perhaps, our first opportunity, I want to enter at any rate my protest against this monstrous proposition that we should begin to move towards a political amalgamation between this United Kingdom, Greece, Turkey and the rest of the present EEC. Even if this House is not prepared to admit that it is absurd, it is absurd in the real world.

11.5 p.m.

The Chief Secretary to the Treasury (Mr. Joel Barnett)

We have had a brief but very interesting debate. I appreciate that many hon. Gentlemen find the procedure unsatisfactory for debating these Orders, but I am happy also, along with the right hon. Member for Down, South (Mr. Powell), to entrust the arrangement of these debates to the hands of—as he put it—our very able and competent Leader of the House and Patronage Secretary. No doubt we shall come back to the question of how we debate these Orders under the EEC, and many other Orders, on other occasions. Perhaps for now I may deal briefly with some of the points raised.

First, I note that the hon. Member for Harrow, East (Mr. Dykes), speaking for the Opposition, welcomed the audit court. I believe that all thinking people will welcome the idea of strengthening the former audit board by full-time members in an audit court, given the additional powers that are recognised in this treaty.

The hon. Member asked me a number of questions concerning the PAC-type body. That is a matter for the Assembly, not for the United Kingdom Government or any other Government, and it will eventually affect its decision as to the timetable for ratification—of the hon. Member's questions.

As for this country, I hope that the House will follow the recommendation of my right hon. Friend in opening this brief debate, and accept these Orders. We shall then have taken the first step to deal with ratification here, and another House will then have to complete the procedure. We shall then have dealt with our share of the ratification. How long it will take other countries is not for me to say. I hope that it will not be too long.

When that has been done I hope, equally, that the Assembly will proceed as fast as possible to set up a PAC-type committee, which I think we would both agree would be helpful for the checking of expenditure in the Community.

The hon. Member for Harrow, East, the right hon. Member for Down, South and my hon. Friend the Member for Newham, South (Mr. Spearing) dealt with Greece, on which, as they will know, I am an expert. The hon. Member for Harrow, East asked me about possible future full membership of Greece in the Community. We are publicly committed to welcoming the future membership of Greece, but, of course, that may be some time ahead. Meanwhile, we have, from our vast experience of these matters, advised Greece to look carefully at the terms of the treaty before committing herself to entry.

I hope that the association convention which we are discussing tonight will be a step in a direction that will be helpful both to Greece and to the Community generally.

Mr. Dykes

Will the right hon. Gentleman confirm that the Orders here relating to Greece do not add anything materially to the terms of the existing association agreement?

Mr. Barnett

I was about to come to the other points raised by my hon. Friend the Member for Newham, South and by the right hon. Gentleman, who—I hope he will not mind my saying this—went rather wide on the subject of economic and monetary union, and so on, and the geographical relationship of Greece to the EEC. I hope that he will forgive me if I do not follow that argument too closely this evening, because if I did so I might be trespassing on the good will of Mr. Deputy Speaker. I certainly would be happy, as the right hon. Gentleman knows, to debate economic and monetary union with him at another time.

I should like to deal now with a point raised by my hon. Friend the Member for Newham, South about the problem—mentioned also by other hon. Members—of the free movement of labour.

Perhaps I may refer directly to the additional protocol to the agreement establishing the association between the EEC and Greece consequent on the accession of new member States to the Community, signed at Brussels on 28th April 1975. Under the additional protocol, new member States accede to the EEC—Greece association agreement which provides for a full customs union between the Community and Greece over a period of 22 years from 1962. In other words, it would be in the interesting year of 1984 that the situation could arise about which my hon. Friend the Member for Newham, South spoke. I hope that he will feel that we shall have one or two more opportunities to debate that matter before we reach that interesting year.

Mr. Spearing

Are we to take it from that that approving Command Paper No. 6289 tonight will not oblige us to accept the free movement of labour in 1984, which, in economic terms, is not very far away?

Mr. Barnett

I am happy to assure my hon. Friend that it will not oblige us.

The hon. Member for Harrow, East spoke about the European Investment Bank and asked a number of questions. He asked about the handling of applications for loans, and whether our applications for loans had been rather slow. In fact, loans approved since 3rd January 1973 to the present time total more than £230 million. I hope that hon. Members will accept that that is a satisfactory re- turn on our initial investment, which we believe is bound to increase as private and public bodies realise the value of this source of medium-term money. I hope that there will be a greater recognition of the value to this country of being able to obtain such loans.

My hon. Friend the Member for Newham, South asked about the unit of account and its relation to the budget unit of account. It is a wholly different matter, of course. The European Investment Bank unit of account is largely a procedural matter, and it is used for the purposes of the preparation of the balance sheet of the European Investment Bank. It will not affect any loans that we receive which are designated in the particular currency in which we receive them. There is little relationship between this and the budget unit of account.

The final question was again asked by my hon. Friend the Member for Newham, South. It referred to the Assembly powers. I recall what my right hon. Friend the Minister of State said in opening. He referred to the powers specifically. But the not very substantial additional powers under the terms of this treaty relate primarily to what we call obligatory expenditure under the treaty—that is to say, the present Article 203 of the treaty establishing the EEC. That provides that the Council must give its approval by a qualified majority in order that these proposed modifications to obligatory expenditure may be accepted. In the treaty submitted for ratification, this rule will remain applicable to modifications proposed by the European Parliament the effect of which would be to increase the total sum of expenditure of an institution. They will also no longer be applicable to modifications proposed by the European Parliament, the effect of which would not be to increase overall expenditure, owing to the fact that the increase in expenditure would be expressly compensated by one or more proposed modifications correspondingly reducing expenditure. In the latter case, if the Council wishes to reject such a proposed modification, it must act by a qualified majority, under Article 203(5)(b).

I am glad to have been able to satisfy my hon. Friend the Member for Newham, South and anyone else who is interested in this very important matter. I hope that the two Orders will be acceptable to the House.

Question put and agreed to.

Resolved, That the European Communities (Definition of Treaties) (No. 3) Order 1975, a draft of which was laid before this House on 12th November 1975, in the last Session of Parliament, be approved.

Resolved, That the European Communities (Definition of Treaties) (No. 4) Order 1975, a draft of which was laid before this House on 2nd December, be approved.—[Mr. Hattersley.]